Nantucket Company Has Two Divisions That Report on a Decentralized

question 125

Essay

Nantucket Company has two divisions that report on a decentralized basis. Their results for 2018 were as follows: $\begin{array}{lrr}&\text { Helmet } &\text { Ball }\\ \text {Sales }&\$ 150,000 & \$ 300,000 \\ \text {Income }&\$ 15,000 & \$ 45,000 \\ \text {Asset base }&\$ 75,000 & \$ 150,000 \\ \text {Weighted average cost of capital }&12 \% & 12 \%\end{array}$
Required:
Compute the following amounts for each division:
a.Return on investment (ROI).
b.Residual income if the desired rate of return is 20 percent.
c.EVA.
d.Turnover.
e.Margin for each division.

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Definitions:

Poor Performer

A term used to describe an employee who consistently fails to meet the performance standards set by their employer.

Union Representative

A person elected or appointed to represent and defend the interests of union members in their workplace, including in negotiations and grievances.

Ombudsperson

An independent, neutral individual appointed to investigate and resolve disputes within an organization.

Neutral Person

An impartial individual who is not involved in a particular conflict or dispute and can facilitate negotiation or decision-making without bias.